Monday, January 7, 2008

What are the rights of a company secretary?

What are the rights of a company secretary?Rights are given to the secretary by the Companies Act, Board of Directors and thegeneral meetings of shareholders. He also derives some rights out of his service agreementwith the company. A secretary has the following rights :(i) He has the right to control and super,vise the working of his department.(ii) As a principal officer of the company, he has the right to sign a document orproceeding requiring authentication by the company.(iii) He has a right to be indemnified by the company for any loss suffered by himwhil.e discharging his duties.(iv)As an employee of the company, he has the right to receive remuneration. Inthe event of winding-up of the company, he has a right to be treated as apreferential..creditor for his salary, subject to a maximum of Rs. 1,000. But a company secretary has no right to borrow money in the name of the companyor to make allotment of shares or register transfer of shares without the expressauthority or consent of the Board of Directors. He has no authority to convene ameeting of the company, or to remove a name from the register of members, or to takepolicy decisions.Explain the role of a company secretary in the functioning of a company.ORDiscuss the role of a ‘Company Secretary’ as a statutory officer and as a corporatemanager.The company secretary plays an important role in company administration.From the position of a clerk, he has risen to the level of an officer of the company. Thescope of his role depends on the size and nature of the company. He is liable not onlyto the company, but also to its shareholders, creditors, employees, consumers, societyand government.Generally speaking, the company secretary plays a three-fold role-as a statutoryofficer, as a co-ordinator and as an administrative officer.As Statutory OfficerAs a principal officer of the company, the company secretary is responsible for strictcompliance with the various provisions of the Companies Act and the requirements of other Acts. HE!has a very important role to play from the incorporation stage to thewinding up of the company. The secretary is required to make statutory declarationof compliance at the time of incorporation and commencement of business. He isresponsible for proper maintenance of books of accounts and other registers. He hasto sign several documents such as annual returns, return of allotment, etc